Abstract Describes and analyses one of the biggest social changes in Britain since the Second World War: the dramatic widening of the income distribution since the end of the 1970s, the growth of poverty, and the factors that have driven them. Examines how government intervention through social spending and the taxes that pay for it affect this distribution, and why they take the forms they do. Each part of the discussion is set in the context of public attitudes as revealed by the long-running British Social Attitudes survey. Analyses changes in policy since New Labour came to government in the UK in 1997, evidence on their impacts, and the constraints and pressures on future policies. Brings together new analysis carried out by the author and colleagues at the Centre for Analysis of Social Exclusion (CASE) at the London School of Economics. Includes material on income dynamics, the relationship between public and private welfare provision and finance, the distributional effect of government spending, public attitudes to inequality and social security, and the impact of recent reforms. Covers topics that are often analysed separately, such as income distribution, social spending, and taxation, but which are best understood together. Concludes with a discussion of the dilemmas facing policy-makers as they try to meet competing aims in terms of reducing poverty and inequality, growing demands on social spending, and the constraints and opportunities created by public attitudes. There are few easy ways out, but better public understanding of precisely that may be one of the crucial ingredients of any resolution.
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